) and end-of-the quarter portfolio adjusting pushed the blue-chip Dow average down nearly 300 points. The tech-heavy Nasdaq, meanwhile, also finished lower.
The Dow Jones industrial average lost 295.670 points, or 3.70%, to 7,701.45. The Nasdaq composite index was off 22.53 points, or 1.84%, to 1,199.08. The broader Standard & Poor's 500-stock index was off 27.60 points, or 3.23%, to 827.35. The worst-performing industry groups were pharmaceuticals, conglomerates, and telecom.
Concerns about corporate earnings and the overall economy will continue to hang over the markets next week. On the economic data front, the key release will be the September employment report, expected Friday. Economic research firm MMS Internationa forecasts a rise of 60,000 in nonfarm payrolls, while manufacturing jobs are expected to dip by 25,000. The weak job growth will likely cause the unemployment rate to tick back up to 5.9%.
Other data releases due next week are expected to give a clearer picture on the health of the economic recovery. Two key gauges of the industrial sector are expected early in the week. On Monday, the September Chicago PMI report is expected, followed Tuesday by the September Institute of Supply management survey. These reports will likely set the tone for much of the week, especially with the ISM index so close to the 50% boom/bust level. On Thursday, August factory orders and inventories are on tap.
On the corporate earnings docket, a report from drugstore chain Walgreen (WAG
) is expected Monday. Soft drink bottler Pepsi Bottling Group (PBG
) is set for Tuesday, while hospital operator Tenet Healthcare (THC
) is slated for Wednesday. Hotel company Marriott International's (MAR
) update is due Thursday, while Dow component Alcoa (AA
) rounds out the week's releases on Friday.
Earnings worries were front and center in Friday's session. Dow member Philip Morris slashed its full-year outlook, saying despite heavy promotions of its premium-priced brands, consumers have turned to deep-discount rivals. The world's largest cigarette maker, whose portfolio is comprised of 90% premium brands and just 10% discount brands, said late Thursday it expects earnings per share to grow 3% to 5% this year, down from the 9% to 11% range it forecast earlier, as consumers turn to deep-discount rivals, according to wire-service reports.
Shares of other tobacco companies, including Big Mo's main U.S. rival R.J. Reynolds (RJR
), also came under pressure.
In other corporate news, shares of another Dow component General Electric Co. (GE
) fell after Wall Street analysts cut their earnings estimates on concerns about stalled growth at its plastics division, and the use of one-time items to meet targets, according to wire-service reports.
In technology, SBC Communications (SBC
) plans to cut its workforce by another 11,000 and reduce capital expenditures in response to a continued weak economy and outmoded regulation that could threaten the future viability of its telecom networks.
And among the pharmaceuticals, Wyeth (WYE
) said it may have to take additional reserves in the future to pay for litigation related to its recalled diet-drug cocktail fen-phen.
Plus, shares of Delta Air Lines (DAL
) tumbled after the company said it sees a third-quarter operating loss of about $225 million.
U.S. Treasuries rebounded from Thursday's modest selloff to finish solidly higher in price Friday as equities sold off.
In economic news, the Commerce Dept. said gross domestic product, the broadest measure of the economy's health, rose at an annual rate of 1.3% in the second quarter, according to wire news reports. The report was the department's "final" or third estimate of GDP. A month ago, Commerce had estimated second-quarter GDP grew only 1.1%.
And the University of Michigan's consumer sentiment index dipped to 86.1 for the final September reading, from 86.2 preliminary and 87.6 for August. The decline likely reflects lingering concerns about possible military action against Iraq, terrorism, stock market turmoil, and the overall economy, notes MMS International.
European markets closed mixed. In London, the Financial Times-Stock Exchange 100 index was up 56.60 points, or 1.47%, to 3,907.20, as UK consumer confidence rose to 4 in September from 2 in August, and second quarter GDP rose 0.6%.
In France, the CAC 40 was lower by 10.94 points, or 0.37%, to 2,950.52, as the French unemployment rate remained at 22-month high of 9%.
And in Germany, the DAX Index fell 101.70 points, or 3.37%, to 2,918.90, taking a cue from U.S. equities, although there was some disappointment that the government plans to raise taxes on corporate asset sales.
In Asia, the markets finished with gains. The Nikkei surged 209.52 points, or 2.25%, to 9,530.44, led by the banking sector. Shares of major banks soared on expectations the government will infuse public funds into the banking system.
In Hong Kong, the market added 23.75 points, or 0.26%, to 9,294.46.